Which Airline Stock is a Better Buy? By StockNews

With rebounding demand for travel due to the lowering of travel restrictions afforded by a strong vaccination drive, and government stimulus packages, the airline industry is likely to recover some of its pandemic-led losses in the near term. Thus, we think popular airlines stocks American Airlines (NASDAQ:) and Alaska Air (NYSE:) will benefit. But which of these stocks is a better buy now? Read more to find out. American Airlines Group Inc. (AAL) in Fort Worth, Tex., is a network air carrier that provides scheduled air transportation services for passengers and cargo. The company offers an average of nearly 6,700 flights per day to nearly 350 destinations in more than 50 countries. In comparison, Alaska Air Group, Inc. (ALK) operates as a passenger and cargo air transportation company. The Seattle, Wash.-based company operates through three segments: Mainline, Regional, and Horizon.

Significant progress on the vaccination front and the gradual easing of travel restrictions are driving a strong rebound in demand for air travel. Consequently, the airline industry is expected to recover some of its pandemic-led losses in the near term. Analysts expect the global RPKs (Revenue Passenger Kilometers) to improve by 50% in 2021. The rising demand for travel should allow AAL and ALK to improve their financials in the coming months.

AAL has gained 42.2% over the past six months, while ALK has returned 16.8% over this period. Also, AAL’s 40% gains year-to-date compare with ALK’s 16.5%. But, in terms of their past year’s performance, AAL is the winner with 93.9% gains versus ALK’s 72.7%.

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